We are just a tad late getting on this train but have just completed our first review...had to go back five years and everything older than that is escheated...what a pain.

Here's my question. If a business (or even a person for that matter) buys cashier's checks out of funds that are not suspicious and they have been outstanding for a couple of years, does everyone just note the source of funds and no cash and move on? You are not trying to contact the customer and ask him what's the deal?

What if they bought 2 cashier's checks and neither has cleared but if they were cashed within a short time of each other they would be structuring...cross that bridge when it happens?

Why in [censored] are you doing this? Who were the checks made payable too? And how does a business entity buy a cashier's check with cash in the first place???

Color me confused. I was under the impression from some things I've seen recently we could expect this on our exam, that we should be reviewing outstanding monetary instruments (we only sell cashier's checks). Here's a sample thread but I've seen others:

https://www.bankersonline.com/forum/ubbthreads.php/topics/2074317

As for who the checks were payable to, in the instance I cited above, one was payable to the business owner and the second to he and his wife together. And we would consider them purchased with cash if cash was deposited just prior to the purchase--in this case, as I said there was no cash. Our outstanding cashier's check recon does not tell us if cash was used, of course, we would have to review to find that. This has been quite a pain and we uncovered zippo.

You are not expected to do this unless you have some misguided examiner land in your lap. Then I would be consulting their supervisor and asking them for what specifics you should be looking for if you are required to conduct such a review and what regulatory requirement such a review based on.

Yes, I will await with interest if our exam team asks for this. We are expecting examiners in about 2 weeks. Truthfully, though, I'm a bit surprised we didn't find anything. Our perception was that people were using cashier's checks to 'store' cash more than it turned out they were, or at least not for long periods. We only looked at items outstanding for 6 months or more.

Since when did it become illegal to store cash via a cashier check? Personally, I have a cashier's check in my safe a home and some extra cash. If I have to, I would rather carry a cashier's check around with me than cash any day. I'm the only one that can spend the cashier's check. Anyone can spend my cash.

My experience. Examiner wanted a SAR filed for possible tax evasion or hiding money from creditors. As the payee of a large check was not our customer, we had to spend time searching for contact information on the them, contact them, and find out why the check had not been negotiated. (Lost possibly.) Turned out they were holding the check due to some litigation with the person who sent them the check. Just know the Examiner may ask about your outstanding Cashier's Checks and if you know why they have not been negotiated.

About 2 years ago, one of my examiners wanted me to add a periodic review of outstanding cashier's checks. Basically he put it as just looking for odd things that just don't make sense and might trigger a SAR.

I have had an instance where someone tried to structure with cashier's checks. A builder asked our customer to pay him in multiple cashier's checks at one time, and he then cashed them individually over the course of 6 months. All the checks were $9,900.00, dated the same date. I think it was a total of 4 or 5 checks. I had already filed on it due to an employee referral, but had the employee not thought to tell me, I may not have caught them or recognized that they were all cut the same day when reviewing the cashed check reports.

I only review quarterly (that was the examiner's suggested time frame), and I basically just look at the source of funds and who its payable to. If it makes sense, I move on. The review generally takes me 15 minutes to complete, and that includes the time to log in and pull the report. I only look at $3,000.00 and up. I also go back and note the ones from the previous review that have cleared.

Identifying someone trying to structure with cashier's checks is not the same as researching every outstanding cashier's check for a reason why someone bought it and why it has not been negotiated.

Examiner wanted a SAR filed for possible tax evasion or hiding money from creditors.

Hiding money from creditors is not illegal and unless someone is buying copious amounts of checks with cash, which should already show up in your normal monitoring reports, suspecting tax evasion is a pipedream.

I was a BSA Officer before this bank and I never had this come up in an exam. There was a fairly short gap (2 years) and now I'm back in BSA and I was hearing this is something we should do because examiners were asking for it. The first review took a while because we went back 5 years and reviewed all outstanding items over $3k. It won't take that long again, but if the examiners do not ask for it I don't know that I'll do it again. We did not contact any payees, just noted the source of funds and who the remitter and payees were. We found nothing suspicious. Of course, if we started tracking down payees and asking questions, that might change, but I'm not going that far at this time.

Agreed. There was one in the FDIC's Memphis region. Now, there are more in the same jurisdiction; it's a very common "issue" now.

Their logic is unimaginably flawed, but it does give them something easy to write about. You can do it before they get there or you can listen to them pontificate. I prefer the former.

I wouldn't look at every outstanding cashier's check, nor would I try to figure out why it hasn't been negotiated. That's way too much in the weeds and has no real value. I think the point of what my examiner recommended was that it was an area to review to see if there was anything I was missing.

In the example I gave, had an employee not pointed it out to me, I may not have caught it at all by just looking at the cashed checks since they were drawn out over time. But I may have caught it if I noticed subsequent check numbers on the same date all for 9900.00 on my outstanding cashier's check report.

My advice, make a risk based decision on if you will look at outstandings, and if so, pick a dollar amount to review for possible issues. Don't get in the weeds of why did they buy it, what was the source of funds, why hasn't it cleared, UNLESS something about it looks fishy.